How To Start a Debt Reduction Business

Debt reduction is a serious business.  People who seek out debt relief are often on the verge of bankruptcy or have nowhere else to turn for help. You must remember that when you start this business it's importtant for you to provide peace of mind as well as your debt relief services.

Begin by obtaining as much knowledge on the subject as possible.  Seek out college courses and seminars, and read every available book that you can to give yourself a rounded knowledge of options you can present your clients.  Purchase a computer and a good printer and invest in appropriate software.  There are a few different debt reduction software programs available, so review them carefully to get the program that best suits your needs.

Create a business plan.  Decide what services you will offer, how you will advertise and the location from which you will provide those services.  If you are renting an office make all of the necessary arrangements to move into the office including deposits, phone installations and appropriate signage.  Make sure you have filed for a fictitious name, business permits and licenses and received approval from any necessary agencies, such as a fire inspection.

Once you are in your office, you will need to establish a routine for helping your customers.  This may consist of having them fill out a questionnaire, bringing in a credit report or printing one at your office, and completing any forms that you may require them to sign so you may work on their behalf.

A very important thing to remember is that you must never give legal advice.  You can represent clients to their creditors, negotiate on their behalf or even arrange repayment plans, but you cannot, ever, give your customers legal advice.  The easiest way to avoid getting into trouble for Unauthorized Practice of Law (UPL) is to have your customers sign a document stating that you are not an attorney and are not authorized to give them legal advice.  A second recommendation is to always have an option available for your customer to choose from when making a decision.  A simple “you can choose this budget or this one” can save you a lot of grief should a problem arise.

Once you start to help, remember to always use compassion when dealing with your clients.  This is a very rough period in their lives and they come to you not only for debt relief but for emotional relief as well.